There are a lot of figures talked about in terms of the Cloud; how much the industry is worth, how many companies are signing up, how many companies plan to. Well here’s another one to add to the mix. IT bosses all over the world predict they’ll be spending $5 billion on outsourced Cloud services this year.
The figures come from Gartner Inc, a research firm that talks to businesses about how they’re working. They say that cloud services are the fastest growing part of outsourcing, expanding by almost 50% from 2011 to 2012.
If we take the business-speak out of there what are we really saying?
Every business leader and entrepreneur knows the importance of the Cloud in terms of cutting costs and streamlining business but there’s another angle here; the Cloud can actually help the economy grow adding to a new industry sector, offering the potential for new jobs, new income strands and new ways to sell in services. This presents a huge opportunity for businesses to fight a downturn and really start to turn a profit.
The whole outsourcing market is worth over $250bn, so in the grand scheme of things $5bn might seem a drop in the proverbial ocean, but the fact that more and more are turning to it makes you wonder what it is that has made Cloud services quite so popular?
Inevitably the hiring of staff is a crucial issue. Cloud services, removing the need for a physical server and signing up to a flexible deal that helps centralise your business data and communications, like Hosted Exchange email services, for example, means you don’t need to hire staff to match your IT growth. You can do more, yet you pay less.
What is the impact on the wider economy? Ok, well the SME who’s bringing in the new cloud services might not be hiring staff but the cloud provider is filling a role that wasn’t there five years ago, so perhaps they have the option to hire. There’s the same number of jobs, just not under the one roof, with the capacity for more to be developed.
Secondly you don’t have to wait for the Cloud. You know what it’s like when you make the decision to change; you don’t want change to start in a week, you want it now. Cloud Services can be deployed instantly; they are integrated straight away and can be downloaded on the day you order. This means you can start to feel the benefits straight away.
The wider economic benefit means that for cloud services providers, for application designers and re-sellers they know that they can have happy clients at the end of the day. If they offer a good service they can be paid quickly and promptly helping them grow and re-invest quicker. The benefits are seen much faster.
Lastly scalability. One of the most attractive reasons for using outsourced Cloud Services is, like a child in front of a Pick and Mix; you can choose what you like and dismiss what you don’t. It isn’t a service off the rack, so to speak but one that’s bespoke. This makes it much more streamlined and cost-effective but it also lets firms and IT bosses focus their money and attention on the cloud services that work for them, that fill the capabilities and functionalities that suit their needs.
For Cloud Service providers this has a knock on effect. You might think it means that they are getting paid less money but if you develop a relationship with a client where you’re giving them exactly what they want then that relationship is likely to be longer and stronger. Plus, working with clients on an ad hoc and bespoke basis means you can get more clients. For many that’s a much successful way of working; if one client goes you’re not left with a big gap between you incomings and outgoings.
The growth of the Cloud in terms of outsourcing is in revolutionising the relationship between companies and their IT providers. Many have painted it as being negative for the IT sector in terms of growth but in fact it presents a real opportunity and a new way of working.